Ep 57. Our Real Life Investing Checklist
Checklist
Read most recent 10k and take notes
find 5 peers
Get longest term stock chart possible, record the number of years and use money chimp CAGR calculator to get the long-term return. We’re doing this because we want to make sure the stock works geometrically overtime
Get longest term stock chart possible for the closest peers and repeat step one. Often, we won’t have the longest chart for a company because of spinoffs. Compare these CAGR’s to the overall market. We want to see if these could work geometrically relative to the market
Calculate EV/Sales, EV- EBITDA, Debt-EBITDA, and CAGR, do min, max, median, mean, SD, CV for all of them
Do a Credit Check, Net Debt-EBITDA, Consecutive years with a profit, EBIT Margin and CV on Margin, Check Z-score and F-score
If the company has a history, get a history of the past financials from EDGAR or OTC markets under disclosures, or from the co’s IR. from past 10k’s for the longest term possible, always want Sales and EBIT for the company we’re studying. Get the longest-term EBIT margin. Take min, max, median, mean, SD, CV (anything under 30% CV is low and good) the lower the better. Calculate sales CAGR and EBIT CAGR – 3 yr, 5 yr, 10 yr, 15 yr, 20 yr if exists and 25 if it exists (want to see if it has slowed down a lot over time)
Check VIC and read the writeups
Use Google to find write-ups/blog posts on the stock and read them
Try finding historical returns of the asset if it’s like Timber, $MLP, etc
Try finding past acquisitions in the industry
Try coming up with an appraisal
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